Moody's rates Tencent notes A1

Moody's Investors Service said it assigned an A1 senior unsecured rating to Tencent Holdings Ltd.'s proposed medium-term notes drawn under its $20 billion global medium-term notes program.

The outlook is stable.

The proceeds will be used for general corporate purposes.

The proposed notes will further enhance Tencent's already strong liquidity position, Moody's said, and enable it to sustain steady growth in revenue and cash flow.

Moreover, the company has maintained its prudent financial discipline and maintain a solid credit profile while expanding its business profile, the agency said.

The proposed drawdown will have a limited impact on its low leverage, which is appropriate for its A1 ratings, Moody's said.

Tencent benefits from the increasing diversification of its revenue resources, the agency said.

Given the persistently solid growth in Tencent's cash flow, Moody's said it believes the benefits of revenue diversification outweigh margin declines.

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